Doing Business In Argentina

The Argentine Customs Bureau established a program allowing duty free admission of
primary and intermediate goods into Argentina for use in export production or for
applying finishing touches on goods destined for re-exportation. This regime, known as
the Temporary Admission for Re-export (TAR) provides opportunities for Argentine
manufacturers of exportable goods to reduce costs by not paying tariffs, VAT, or
anticipated profits tax on imported inputs. This also is important for Argentine
businesses that make repairs on goods that are shipped from other countries. Between
1999 and 2003 temporary imports have increased by 65%, while imports in general have
fallen by 16%. Nearly one-fifth of all Argentine exports are related in some way to this
regime. U.S. exporters of processed and unprocessed inputs into Argentine export
production can take advantage of the Temporary Import Regime. This is especially
attractive since Argentine exports are surging since the devaluation of the Peso in
January 2002. This regime will be phased out beginning January 1st, 2006.
Decree 1439/96 for the duty free admission of primary and intermediate goods for use
in export production, as well as exemption from VAT, statistics fee and anticipated profits
taxes. Argentine manufacturers that use imported processed and unprocessed inputs,
auxiliary elements, packaging and bottling materials that are involved in the production
process are exempt from tariffs and taxes if the final good is exported to a third country.
This regime also benefits repair service providers who receive goods shipped from
abroad. These finished goods must be exported within 180 days, although extensions for
an additional 180 days are permitted. A bond is required to cover the value of import
charges for the goods, which will be refunded when the goods are re-exported. The
more a company pays in import duties on its inputs the more incentive it has to take
advantage of this regime.
Goods are considered eligible for the TAR program if they are substantially transformed
in an industrial process that has the end goal of producing an export. Examples of
“transformation” include: manufacturing, combination, mixture, dosage, repair,
rehabilitation, assembly, or installation within a more complex final product. This
includes products that are consumed either completely or partially in another process, as
with oils and combustibles, disposable materials used in a production process,
machinery parts, packaging and bottling, etc. Damaged goods in need of repair can also
enter the country under this program to undergo repairs, contingent upon their
subsequent re-exportation.
These goods may remain in Argentina without paying tariffs for a one-year period, or in
the case of inputs for the production of capital goods that are listed as “non-serialized”
by the MERCOSUR Common Nomenclature System. Failure to re-export goods will
result in a fine.
The sectors that take advantage of this regime are automotive, chemical, basic
metallurgy, food and beverage, machinery and equipment, leather, petrochemical, and
paper. The usage of this regime is highly concentrated: approximately 10% of the firms
that have used this regime import 90% of the goods that qualify.
Timeframes for merchandise imported into the country.
a) For general merchandise:
3/4/2008